Why oil prices aren’t too slick these days

This Bloomberg article (below) is one of those which we (as ordinary man-in-the-street petrol buyers) want to be right.

But don’t get too enthusiastic. The SA government has already managed to thwart our joy at the halving of the oil price earlier this year, by imposing higher fuel levies and other assorted extras - and writing-off almost all we gained. So you can be sure that they’ll be trying to find other ways of deviating these latest petrol price savings into government income.

Bloomberg News – August 4, 2015.

Oil has fallen to a six-month low, and hopes of a quick rebound are fading as demand heads into an autumn swoon.

Brent crude tumbled below US$50 on Monday for the first time since January…..

The slump may have further to go. US refineries, which turned a record amount of crude into gasoline during July, typically slow down from August through October for maintenance.

“We still have a lot of global oversupply,” Michael Wittner, head of oil-market research at Société Générale in New York, said on Bloomberg TV Monday. “We’re getting close to the autumn, [when] demand for crude and products hits a seasonal low point, so it’s hard to see where the uplift is going to come from.”

Also, demand for gasoline typically eases after summer as the seasonal workforce shrinks and families stop vacationing.

Hedge funds are growing more pessimistic. Money managers cut bets on rising Brent prices last week by the most in more than a year and are the least bullish on US crude since 2010.